Friday, August 6, 2010

The Music Copyright Enforcers

Here's an excellent article from the New York Times about copyright enforcement. It's long but filled with interesting information on how the publishing rights organizations (BMI in this case) collects the money that it doles out to songwriters and publishers.

To summarize, the way a publishing rights organization (PRO) collects money is by making licensing deals with the various broadcast entities like television networks and radio, but also with any business that plays music. If you own a restaurant, gym, or just a retail store playing background music, you need a license and must pay accordingly. Even clubs where live music is played must have a license. As you might expect, collecting from a small mom & pop store, bar or club that doesn't have a lot to begin with isn't that easy.

I've been on both sides of this equation. As a songwriter, I loved the fact that someone was actually out there scouring the country to collect money for me (although I'd only see a very very very small piece of it). As a former restaurant owner, I hated the fact that we had to pay what we thought was an excessively high fee for the privilege of playing background music in our establishment, although we did pay it.

The article also has some great info on how the PRO's started, and some of the their high-teck tracking technology.

It's a great article and worth a read - The Music-Copyright Enforcers.

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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Wednesday, August 4, 2010

Social Networking Now More Popular Than Email

The latest data from research company Nielsen indicates that Americans now devote a full 6 hours a month to social networking, up 16% from a year ago.

And what network do they spend their time on? You guessed it! Facebook claims an 85% share while MySpace comes in a way distant second with only 5%, and Twitter only 1%.

So if most time was spent on social networks, what else captures our attention? Online games account for 10% of time spent, while email came in at 8%. Watching video is now a full 4% of all time spent online, which amounts to an average of 3 hours and 15 minutes a month.

As an artist, you may look at those numbers and be tempted to concentrate entirely on social networking for building and communicating with your audience, but that would be short-sighted.

If you read this blog a lot you know that I've always advocated that you capture as many of your friends and fans from your social networks to your mailing list. The mailing list is still your most powerful means of engagement with your fanbase and tribe. Not only is there a personal aspect to receiving an email that fans love, but you also have the advantage of deep metrics not available from many social networks that can be useful in any marketing or promotional campaign.

Remember that a well-formed online strategy features many different and equally important parts.

  • Your website is your hub of information and engagement via new content and point of sale.
  • Your social networks are your means of frequent but rather impersonal fan engagement.
  • Your email list is your means for infrequent but personal engagement. It's your direct marketing tool that can be used for sales (a soft sell hopefully), general information and marketing.

Yes, we're spending more and more time these days social networking, but you still need the other pieces too for a successful online strategy. Don't overlook them.

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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Tuesday, August 3, 2010

Apple's Cloud Music Service A Mirage?

Yesterday I wrote about the likelihood of Apple debuting a cloud-based service in the near future. Today comes word from Cnet that's might not be the kind of service that Apple has planned after all.

If your not familiar with the term "cloud," it means online storage. An iTunes cloud service would allow you to put all of your music online instead of keeping a copy on each device. That means that you can access it from your computer, your phone, or iPad, or anything else connected to the Internet.

But the problem is that a new service would require a new license for the songs from the major and indie labels, and Apple still hasn't even begun negotiations, which means that we won't see the envisioned cloud service anytime soon. Negotiations with one label takes months and months, let alone with all four majors. We'd be lucky to see it in a year.

So why is Apple building a huge new server farm (they call it the "Orchard") in North Carolina?

The speculation is that Apple isn't looking to launch a cloud music service at all. It's for video.

If this is the case, here's how I see it.
  • 1) Apple is going after YouTube. Why else build a server farm for video?
  • 2) Apple will launch a music subscription service earlier than anyone expected. If the cloud music service isn't an interim step to subscription, that means they're going right to subscription, right?
All this means it should make for a very interesting year of Apple watching.

P.S. It's been reported this morning that Apple has added cloud streaming to its MobileMe iDisk app. It has some limitations though, since it appears to be limited to Apple products, and doesn't support automatic uploads as you add songs to iTunes, playlists or album cover artwork. This shouldn't be considered a cloud music service, just an iDisk improvement, but it can be construed as Apple testing the waters before a full product introduction.

The plot twists and thickens yet again.
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Monday, August 2, 2010

Interesting July Music Stats

Digital music information and strategy company Music Alley puts together an interesting monthly report called NumberCrunch that includes some interesting statistics culled from information sources like NPD, Forrester and Neilsen/Soundscan. Here are a few points that I found interesting (my comments in italics).
  • In the first half of 2010, digital album sales grew by 12.7% to 42.2 million units. If the album was supposed to be a dying format, why does it have a healthy growth of almost 13%?
  • Digital albums now account for 27.4% of all US album sales. That means that the market for albums is still about 160 million, of which about 120 million are still CDs. The CD may be dying, but there's still plenty of sales life left in it according to these numbers.
  • According to media analyst NPD, 7 to 8 million iTunes users in the US would be interested in paying at least $10 a month for cloud-based iTunes services to access their music libraries across multiple platforms. You can bet that Apple will be rolling this out by the end of the year or beginning of next, since they already have the infrastructure in place.
  • 13 to 15 million iTunes users would be interested if the service was free. Doubtful that will happen though, unless the service can be monetized in some other way. 
  • Analyst Russ Crupnick claims that the potential market for a paid subscription-based iTunes would be $1 billion in it's first year alone, which is about 2/3rds of what its present pay-per-download model. This is the 800 pound gorilla in the room. Almost everyone believes that if Apple pulls the subscription trigger, subscription will become accepted by the consumer almost overnight. But when will it happen? Probably not until well after their cloud service comes into being.
  • Home computers accounted for 41.6% of digital music consumption in Q3 of 2009, followed by MP3 players at 32/5%, mobile phones by 12.1% and home streaming devices by 11.1%. That must mean that most people consume most of their music at work.
  • Only 23% of people said they listened to music on both their computer and MP3 player, 9% on computer and mobile phone, and 5% on all four platforms. This could be a bad sign for a cloud-based service, as most people won't have any use for it.
  • 63% of the people listening to music on their phones are 18 to 24 years old. Is this figure really any surprise to anyone?
I think the most interesting thing about these figures is that the conclusions have been holding steady for quite some time now. Let's see what next month brings.

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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Sunday, August 1, 2010

Cassettes Making A Comeback?

According to an article in the Sunday LA Times, the lowly audio-cassette tape is making a comeback of sorts. The article states that there are a few record labels like Kill/Hurt, Not Not Fun, Bridgetown Records and Burger Records that use cassettes as a promotional tool of sorts, and actually sell out of short runs!

We all thought that cassettes were history and according to Soundscan, only 34,000 were soldin 2009, but it seems like there's enough of an appetite for new product, and there are enough tape machines still out there that work to constitute a market. In fact, M2 Communications (where Burger Records get their tapes duplicated at) state that they're currently duplicating being 6,000 and 10,000 a month.

The key to making this work is pricing - $6 per unit. Of course, short runs of only 250 (usually at a buck a copy cost) makes the outlay and the risk small, and also make it an exclusive piece of merch for the true fan.

Cassettes are actually not that bad a distribution medium in terms of reproduction quality. Sure, when they first came out in the late 60's the quality was pretty poor, but by the end of their reign the playback quality was surprisingly good. I remember taking a tour of a record pressing and tape duplicator and hearing some tapes off the line played back in the QC department and being shocked how good they sounded. The key, of course, was that their playback deck was aligned weekly, something that never happened in consumer decks.

While the return of the cassette tape is a short-lived fad that will be nothing but a sales blip (if that), it is a good example of thinking outside the box in terms of marketing. It also goes to show that in Music 3.0 almost anything works, even if it's low tech.

Follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.


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